Following Apple, RIM hopes to grow its presence in China

As Apple's iPhone prepares for its debut in China later this year, competing handset maker Research in Motion is also pushing for its BlackBerry line to expand to 3G in the nation of over one billion.

In a new note to investors, research analyst Shaw Wu with Kaufman Bros. said while Apple has garnered a great deal of media coverage during its lengthy negotiations with China Mobile, RIM has quietly been working on its own deal with China Telecom. While the wireless carrier is the smallest of the "Big 3" in China, Wu said he believes the provider is a good fit for RIM as it prepares to offer more devices in the market. He believes an announcement of a deal could be made as soon as February 2010.

Currently, China Mobile offers a few 2G BlackBerry devices, but the country as a whole has been reluctant to embrace RIM's offerings because they are seen as "too secure," and do not allow surveillance. This, of course, is a stark contrast from the U.S., where security concerns have made BlackBerry the default smartphone within the U.S. government.

"From our understanding, in the past, RIM has been reluctant to modify its security software just for China and frankly was stretched keeping up with robust demand in North America," the report reads. "Now with China upgrading to 3G networks, with 700 million subscribers and with Apple entering, RIM simply cannot ignore the world's largest wireless market."

Wu said that sources suggest China Telecom is the frontrunner to carry new 3G BlackBerries. Reportedly, the handset maker is beta testing its localized hardware and working to make it work better with Chinese characters.

"On a technical level, we believe partnering with China Telecom makes a lot of sense in that the hardware should require very minor modification as it also runs the same QCOM CDMA technology used by Verizon," Wu said.

Last week, China Unicom and Apple announced they had reached a three year deal to sell the iPhone starting in the fourth quarter of 2009. But the agreement is not exclusive to the carrier, which has led to speculation that Apple is looking to also sell the iPhone through the nation's largest carrier, China Mobile.

While China Mobile has an estimated 498 million subscribers, China Telecom has only 42 million. But Wu said that China Telecom also has a strong customer base in enterprise and government, the market segment that might be likely to opt for the BlackBerry.

Too secure? Yeah, that was the case when they repeatedly lost emails due to sever outages in Canada.. And isn't there always the chance that someone could snoop on communications if they're grabbing the emails from a third-party and sending them to you? I find that statement of security hard to believe... but then I figure China is complaining that RIM just won't do business there, because they can't easily modify their software to be localized

'following apple' seems to be also a rather silly way to put this. i don't think negotiations started just last week, did they? for all you know they may have been talking longer than apple... \

My comment, albeit a light hearted one before my serious comment about real v virtual keyboards for China, which you didn't comment on, was in the larger context not just this one incident. I have been using Apple, IBM and M$ products since the 1970s, and 'following Apple' has been the industry MO for over 30 years.

From Apple ][ - to new Mac Pro I've owned them all.Long on AAPL so biased"Google doesn't sell you anything, Google just sells you!"

Too secure? Yeah, that was the case when they repeatedly lost emails due to sever outages in Canada.. And isn't there always the chance that someone could snoop on communications if they're grabbing the emails from a third-party and sending them to you? I find that statement of security hard to believe... but then I figure China is complaining that RIM just won't do business there, because they can't easily modify their software to be localized

RiMs BES is right up Chinas alley. Of course, nothing will go through Canada, but the Chinese government having a great deal of business going through a single server system that they control seems like something they would be into.

Quote:

Originally Posted by digitalclips

"Following Apple", that seems to be the industry's MO!

However, RIM's real keyboard may just be a snag here ... surely they won't adopt the system they mocked?

HAHA How do you represent a Chinese keyboard on a 4 wide smartphone without it being completely virtual?